Mukherjee (top) , Subbarao: In talks

Washington, Sept. 24 (PTI): Finance minister Pranab Mukherjee has said intervention in the currency market will be considered at an appropriate stage and he has discussed with Reserve Bank governor D. Subbarao about the situation created by the depreciating rupee in the past few days.

“I had a discussion with the RBI governor as he is here,” Mukherjee said.

The finance minister and the RBI governor are here to attend the annual meetings of the International Monetary Fund and the World Bank.

Mukherjee said the government was closely monitoring the situation and intervention in the currency market would be considered whenever necessary.

“We will watch the situation for some time and as and when intervention is required it will be considered at that stage,” Mukherjee said.

In order to check high volatility in local currency value, central banks world over intervene through buying or selling of currencies.

This week alone, the rupee lost 231 paise, or 4.89 per cent, against the dollar. On Friday, the rupee closed at 49.44 per dollar after falling to 49.90 per dollar. The sharp depreciation in the rupee has been mainly attributed to the rising demand for dollars from foreign institutional investors and oil companies.

On the rupee situation, RBI deputy governor Subir Gokarn had said, “We, at this point, do not see any intervention from a rate targeting view point. That is something that will reflect a change in policy stance, which we are not doing at this point.”

Europe action

The United States today ramped up pressure on Europe to take swift action to contain the eurozone debt crisis, warning that the entire global economy was at stake.

“Sovereign and banking stresses in Europe are the most serious risk now confronting the world economy,” US Treasury Secretary Timothy Geithner said in a speech to the IMF’s steering body.